Taxing remittances could be burdensome
BENGALURU: Many fear that it may be burdensome if the government begins to tax remittances. In Finance, the government has proposed a 5% tax collection at the source (TCS) for more than Rs 7 lakh under the Liberalized Remittance Scheme. This will block a large part of the funds for those who wish to send money abroad.
The finance bill establishes that banks that receive Rs 7 lakh from an individual for remittances outside India under the LRS or from a seller of a tourist package must debit an amount equal to five percent of the amount remitted as a tax on the rent.
The president of Manipal Education, Mohandas Pai, raised the issue of taxing remittances on Sunday. In a tweet to the FM, he asked: “5% tax collection at the source of remittances of more than Rs 7 lakh. Lord, this is very wrong; Why is there a tax on our own tax-paid money when we make remittances? Where is the ease of living?
TOI has reported that Indians on average send $ 1.5 billion (Rs 10.7 billion rupees) abroad each month for several reasons, such as student fees, travel, gifts and medical treatment. If it is taxed at 5%, the government can raise about $ 75 million each month.